Crude Palm Oil Palm oil is obtained from fresh fruit bunches (FFB) of oil palm cultivated in plantations.

There are several commercial variants of palm oil available viz., Crude Palmoil, Crude Palmolein, RBD (Refined Bleached Deoderised) Palmoil, RBD Palmolien and Palm Kernel Oil. Crude Palmoil when subjected to refining results in the other factions. Global Scenario

Palmoil with an annual production of 25-27 million tons is second most produced oil in the world. Malaysia (13 million tons) and Indonesia (10 million tons) are the major producers. They together account for 85% of production. Around 80% (21-23 million tons) of global production is exported. Malaysia and Indonesia with 12-12.5 and 6-7 million tons respectively are major exporters. India, China and EU are the major importers. Price competitiveness has been reason for increased consumption of this oil.

Important World Palmoil Markets

Bursa Malaysian Derivatives (BMD) is the largest futures market for crude palmoil. Malaysian & Indonesian FOB prices set the mood in the physical market

Indian Scenario

India imports roughly 2.5-3.5 million tons of palmoil and its variants a year. The domestic production is very meager at 0.5 lakh tons. India imposes 65% duty on crude oil and 75% (imposed in 2003-04 Union Budget) on RBD Palmoil. The import ratio is highly dependent on the duty imposed. In addition to the customs duty, Government of India also imposes tariff value, on which the customs duty is calculated irrespective of the actual price at which the oil is imported. In 2002-03 India imported 21.5 lakh tons of crude palmoil and 3.15 lakh tons of RBD Palmoil. However, in 2003-04 till July from November '03 India has imported 13.7 lakh tons of crude palmoil and 4.8 lakh tons of RBD Palmoil. Kandla, Mumbai, Kakinada are the major ports for palmoil entry to India and the major trading points too.

India In World Palmoil Industry (Rounded figs.) Annual Oil Production Annual Oil Imports Annual Oil Consumption Factors influencing Palmoil Prices

India World (In million Tons) 0.05 26 3 22 3 26

% Share 0.2 13.6 11.5

The supply demand and price scenario of competitive oils, viz., soyoil. The supply-demand scenario of all oils and oilseeds in the consuming centers, viz., Inda, China and EU. This in turn is manifested as imports from these countries. The palmoil production cycle: April - December is peak production period. Import regulations imposed in the importing countries.

12/9/2012 NEW DELHI(Commodity Online): Refined palm oil imports for August is estimated to be down in India as the worlds top vegetable oil buyer raised its duty on purchases to cut cheap supplies from Indonesia, according to a Reuters survey. India's import of palm oil in August is expected to be between 60,000 and 125,000 tons, with the average at 89,166 tons. The estimate is down 20.8 percent from July. In the current year Indias refined palm oil imports have surged overall by about 80 percent to 1.3 million tons in the first nine months from November 2011.The surge was because taxes were hanged in October 2011 by the worlds No. 1 palm oil producer Indonesia to make the product cheaper and support its own refining industry. Refined palmolein imports is expected to hover around this figure, close to last years average of 90,000 to 100,000 tons, until the end of the current year in October, in response to the protective step by the Indian government, says traders. As prices of the crude variant eased about 6 percent in the first half of last month because of growing stocks in Malaysia total palm oil imports rose 17.2 percent to 716,750 tons. On a cost and freight basis on Indias west coast, imported refined palm oil was quoted at about $990 per ton and imported crude palm oil was quoted at around $960 per ton.

01/10/12

AHMEDABAD(Commodity Online): Rising crude palm oil stocks and uncertain global economic outlook is driving palm oil futures to the valleys from the hills. The futures tumbled to the lowest point in more than two years on Monday. December contract CPO futures on Bursa Malaysia dipped by 2.8% to 2,475 ringgit ($807) -- the lowest since July 2010. Time immediate to after noon break session saw the futures at 2,487 ringgit per ton. The stocks -- I think that is a major factor in the market that is worrying a lot of players," said a trader with a foreign commodities brokerage to Reuters. "A lot of people expected exports for last month to be good, but the basic thing is the end-stocks is still growing higher. That's the problem there. The stocks are not coming down." On India's MCX crude palm oil for October delivery is trading on a bearish note with support expected at 416 levels; currently, the futures are at 429 down by 2.92% Bloomberg 10/10/2012 Palm-oil stockpiles in Malaysia, the worlds second-largest producer, jumped to a record as a surge in output and an economic slowdown in China and Europe weakened demand for the commodity used in food and biofuel. Inventories jumped 17.4 percent to 2.48 million metric tons in September from a revised 2.11 million tons in August, the Malaysian Palm Oil Board said in a statement today. That is higher than the median estimate of 2.43 million tons in a Bloomberg survey last week and surpassed the previous all-time high of 2.27 million tons in November 2008. Output surged 20 percent to 2 million tons, a monthly record, while exports rose 4.5 percent to 1.51 million tons. Rising supplies may pressure futures which plunged to the lowest level in almost three years in Kuala Lumpur last week as a deepening economic slowdown hurt demand. Stockpiles will continue to expand in October, November and December and may reach as high as 3 million tons by January, Dorab Mistry, director at Godrej International Ltd., said Sept. 23. This is definitely going to weigh on prices, Abah Ofon, an analyst at Standard Chartered Plc, said by phone from Singapore today. Policy makers in Malaysia are a little bit more proactive with regards to trying to mop up some of this inventory. This is going to limit the downside.

Tax Cut
Malaysias Plantations Industries and Commodities Minister Bernard Dompok today said that the cabinet had agreed to review the export tax structure for crude palm oil and the country will work with Indonesia to stabilize prices. The extent of the cut has yet to be decided, said Dompok, who will present to the cabinet a proposal on Oct. 12. He proposed a cut to between 8 percent and 10 percent from 23 percent on Oct. 3.

Indonesia reduced taxes last year to boost shipments of processed oil, increasing competition for Malaysia. Palm oil for December delivery gained 0.8 percent to 2,457 ringgit ($799) a ton on the Malaysia Derivatives Exchange, the highest price at close for the most-active contract since Oct. 1. Futures dropped 5.2 percent last week after falling on Oct. 2 to the lowest close since November 2009. I would expect to see demand coming back in strongly at these levels, said Ofon. With Indonesia now such a fierce competitor, the issue whether demand actually goes into Malaysia is arguable, a lot of that demand may just actually veer off to Indonesia instead. Malaysian output may increase this month before declining sharply as the high production season ends, Ofon said. Output typically peaks between July and October, before tapering off from November onwards. Exports from Malaysia fell 1 percent to 448,624 tons in the first 10 days of October from 453,302 tons in the same period in September, surveyor Intertek said